One of the things I follow quite intently is growth in domain names – both internationally, but also especially in the .nz top level domain.

One of the reasons for my interest, is I am a director of .nz Registry Services that runs the register for the .nz TLD. But I am also interested in what they may mean generally for Internet uptake and more recently the health of the economy.

As uou can see, the growth has been rather healthy. But in the last year, the market has changed. It is still growing, but by far less than before.

So annual growth in .nz names has dropped from over 50,000 to under 35,000 and still declining.

Looking at the last few years in terms of percentage annual growth, we hit 25% around two years ago, and it is now down to just 10%. Now 10% annual growth is still pretty good – many businesses would give their right arm for it. But it is interesti ng trying to work out why the growth has reduced so much.

Is it everyone is now connected? Is it the best names are all gone? Is it the recession? That’s some of the quesions I’m grappling with.

One interesting thing is that the drop in growth seems to be due to increased cancellations of existing names, than a large drop off in registrations of new names. So some of it may be speculators reducing their stocks. Or it may be businesses just rationalising their portfolios.

At the end of the day the cost of a domain name is insignificant to most customers. The wholesale fee is $1.50 a month. So how elastic or inelastic is the market I wonder?

The other interesting aspect is competition. If you want a .nz domain name you can choose from around 70 different registrars or retailers, but they all interface with the unique register (it is a naturaly monopoly because you can have only one authoritative register). But people can choose to get a .com, .net, .info etc. In some countries more registrants have a .com name than a .countrycode name. In NZ we have one of the higher country loyalties with most registrants having a .nz name over a .com.

If you are a domain name registrant, and you have been changing or reducing your “portfolio”, I’d be interested in any stories as to why.

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This entry was posted on Monday, January 26th, 2009 at 9:00 am and is filed under Internet.
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15 Responses to “.nz domain name growth”

The good .co.nz names are gone. People are also dumping a lot of them one year after registration because they don’t command anything like the .com equivalent, nor is the type-in traffic of sufficient volume to cover the cost of registration.

Perhaps people have finally cottoned on that the actual content of a domain name became far less important as search engines improved and proliferated, and especially as Google became so dominant. You don’t often have to remember a domain name now.

In early years there was great competition to grab this or that name, and speculators took many in the hope of being able to sell them later. They don’t seem to matter now. The addition of new domain classes has helped reduce the exclusivity too.

Fewer businesses seem to want .com addresses since the dot com boom failed. You barely notice now whether a business has an NZ or American domain suffix. You even wonder why the New Zealand Stock Exchange is a dot com instead of a dot co nz. Is this just delusions of grandeur that it will become a world powerhouse?

Perhaps all this means that the speculators have pulled out of your market Mr Farrar and that companies no longer want to protect themselves by taking out a slab of domain names.

Since you are on the domain authority, however, can you tell us are you folk doing anything to help with transportability of email addresses so that we aren’t locked into ISPs? Is there anything that can be done about this?

[DPF: If you get your own domain name, then the e-mail addresses you use are totally portable. This is one of the major reasons individuals get domain names]

I think the web-aware market has become quite saturated. In other words, those who think they need a domain name most like have theirs.

The intriguing aspect for me will be when those who are not web-aware start thinking about getting their own domain name. There are still a lot of industries where businesses – mainly small – don’t have a domain name and this is an area for future growth.

On a practical basis, if I’m helping a Not For Profit group set up a web site (I almost only use Drupal now), I’ll look at a .info or similar. The cost difference is still minor but significant. It’s interesting to note that the whole sale cost is around $1.5 per month – the retail price is around double that.

Since you are on the domain authority, however, can you tell us are you folk doing anything to help with transportability of email addresses so that we aren’t locked into ISPs? Is there anything that can be done about this?”

I gave up on my NZ domain names. Dealing with ICONZ was just too painful, they billed when they should not have, etc. and the price difference for a .com + US based hosting was just more attractive, cheap and stable.

.nz names are still too expensive and the whole process of registering a cheap .com along with cheap hosting is so much simpler than is often the case when trying to set up a .nz site.

For a few mouse-clicks and less than NZ$10 a month you can get a .com domain and effectively unlimited hosting through many US-based hosting companies, which compares poorly with the complexity and cost of going the .nz route.

Then there’s the extra street-cred that a .com name gives you when dealing in the global marketplace.

Try telling someone in the USA what your .nz email address or domain name is over the phone…

I have three domain names http://www.spartans.co.nz, http://www.gridiron.co.nz and http://www.americanfootball.co.nz . These all go to my sports clubs site. I annoyed lots of people by getting the good ones but first in first served on these things. There is no reason to buy any more for that so not buying any more in the near future. My wife on the other hand seems to be collecting domain names like hand bags. She biys .com sites as her clients are mostly US housewives. Also they are cheaper than .co.nz sites.